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Banking Crypto on Hedera🔥BankSocial CEO INTERVIEW · The Paul Barron Crypto Show

0:07
Speaker 1: Banking and social is going to be our topic today.
0:09
Speaker 1: We're going to dive in a little deeper to a
0:12
Speaker 1: project that is associated with Hedera. We actually had Man's
0:14
Speaker 1: harmonon not too long ago. He referenced it. We wanted
0:17
Speaker 1: to dive in a little deeper. I think you guys
0:19
Speaker 1: are gonna like it. My name is Paul Barrel. Welcome
0:21
Speaker 1: back in a tech path. I'm just back off of
0:23
Speaker 1: a big event. We had a chance to actually go
0:26
Speaker 1: out and speak with some industry players in various industries
0:30
Speaker 1: about blockchain. So I'm back in studio. We'll get dive
0:33
Speaker 1: in deep. I do want to thank our sponsor on
0:35
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0:37
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0:39
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0:51
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1:01
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1:03
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1:07
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1:09
Speaker 1: our discount code. It helps the channel, all right. So
1:12
Speaker 1: there's a couple of things that we've been talking about,
1:15
Speaker 1: and one of them has been the issue of banks
1:19
Speaker 1: and the d banking phase that the industry has been
1:22
Speaker 1: going through for some time. This, of course was talking
1:25
Speaker 1: about Juno Juno. Also, this is a tweet from that
1:28
Speaker 1: was talking with David Marcus all the way back in
1:30
Speaker 1: April of this year. But Juno was one of those
1:33
Speaker 1: banks that had a little bit of I think possibility,
1:37
Speaker 1: and of course we saw it in itself also run
1:40
Speaker 1: into the challenges that many banks have been running into,
1:43
Speaker 1: and that is being able to bank inside a crypto ecosystem.
1:47
Speaker 1: So with that being said, I want to jump to
1:50
Speaker 1: this tweet right here. This is Bank's Social. They're just
1:53
Speaker 1: getting started, ten thousand wallets and going. So we thought, well,
1:56
Speaker 1: let's get the bank Social guys on and dive in
1:58
Speaker 1: a little deeper. So I want to welcome we Gate
2:00
Speaker 1: coming over from Bank Social. Great to have you John,
2:04
Speaker 1: great to be on, Paul, thanks so much. So. A
2:07
Speaker 1: lot happening in the banking space right now when you
2:10
Speaker 1: look at just the capacity of what many companies, businesses, etc.
2:16
Speaker 1: Whether you're in crypto or not, maybe you're using crypto
2:19
Speaker 1: more often. This is becoming more and more of an
2:23
Speaker 1: issue overall. What is first of all, just kind of
2:26
Speaker 1: give us a little bit about what Bank Social is first.
2:30
Speaker 2: Yeah, so we are a financial ecosystem generally bridging the
2:35
Speaker 2: concept of DeFi and crypto and kind of the evolution
2:40
Speaker 2: of financial systems into the regulated space of financial ecosystems.
2:45
Speaker 2: So we mostly work with credit unions and community financial institutions,
2:50
Speaker 2: and we can talk about why here in a little bit,
2:54
Speaker 2: where we're gaining the most traction and having the most
2:56
Speaker 2: success is enabling the members you know, that's businesses, whether
3:01
Speaker 2: that's consumers into utilizing crypto technologies both you know, very
3:07
Speaker 2: very candidly and you know in your hand, in your face,
3:10
Speaker 2: and then even more behind the scenes, things that provide
3:13
Speaker 2: immutability to banking transactions and help regulators and you know,
3:17
Speaker 2: help banks be more efficient, help credit unions be more
3:20
Speaker 2: efficient with money movement. You know, how do we bring
3:24
Speaker 2: them forward. We kind of equate banks. You know, I
3:27
Speaker 2: don't know if you know this, but they're using technology
3:30
Speaker 2: that's thirty forty five years old. There's such an opportunity
3:32
Speaker 2: to bring them forward. So lots to talk about here
3:35
Speaker 2: for sure.
3:35
Speaker 1: Yeah, we've seen a lot of the credit unions kind
3:38
Speaker 1: of lead the way in a lot of different financial instruments,
3:41
Speaker 1: whether it's real estate, automobile loans, et cetera.
3:43
Speaker 2: But they are randomous banking.
3:46
Speaker 1: There you go, good example, which has been one of
3:48
Speaker 1: the biggest issues out there that we've continued to see
3:52
Speaker 1: on a challenge point. And I was looking at your
3:55
Speaker 1: website where you're available US Canada not necessarily could right now.
4:01
Speaker 1: And then you've got a lot of states. Some kind
4:02
Speaker 1: of zoom in on those for our viewers right now, California, Florida, Texas, Oklahoma, Idahoa, Minnesota.
4:09
Speaker 1: You guys can kind of see it if you're listening
4:12
Speaker 1: to the podcast, jump over the YouTube channel to check
4:14
Speaker 1: it out. So not all states, but a lot. What
4:17
Speaker 1: is holding you back from getting into all fifty states?
4:21
Speaker 2: Well, so there's a bunch of components to our ecosystem.
4:25
Speaker 2: That's the digital asset exchange component. We do have a
4:28
Speaker 2: couple credit unions launching here pretty quickly. I think within
4:33
Speaker 2: the next fifteen to thirty days. That will expand the
4:36
Speaker 2: opportunity for us to serve members and serve people all across,
4:39
Speaker 2: for example, the United States, and then looking at how
4:42
Speaker 2: we can do that. That's the digital asset exchange component.
4:45
Speaker 2: We really have a financial platform for money movement, a
4:49
Speaker 2: digital wallet, you know, all the pieces, identity, all the
4:52
Speaker 2: pieces you would need to build a finance A self custody.
4:55
Speaker 2: I think I love what you said in the very
4:57
Speaker 2: beginning about self custody, because we're all about self custody.
5:00
Speaker 2: We believe that is the reason why crypto was created,
5:04
Speaker 2: Not so that bank A or Bank B can create
5:06
Speaker 2: a private ledger and then everybody uses. That kind of
5:09
Speaker 2: defeats the purpose of crypto, right.
5:12
Speaker 1: Yeah.
5:13
Speaker 2: You know, we're working with banks, for example, that want
5:15
Speaker 2: to tokenize loan participations, so being able to provide liquidity
5:20
Speaker 2: pools for banks to transfer money between banks. That just
5:24
Speaker 2: make the whole I mean, if only half of the
5:27
Speaker 2: equation or twenty percent of the equation gets more efficient,
5:30
Speaker 2: do we really benefit from that.
5:31
Speaker 1: Not?
5:32
Speaker 2: Really, You kind of have to reimagine the whole equation
5:35
Speaker 2: the whole ecosystem, and that's what we're doing at banks Social.
5:38
Speaker 1: So the involvement with the credit unions, how close is
5:44
Speaker 1: that in terms of actually working with the credit unions?
5:47
Speaker 1: Are you primarily providing technology enablement or are you actually
5:51
Speaker 1: working more directly inside with these organizations both.
5:56
Speaker 2: So, initially kind of our tip of the spears, we
5:59
Speaker 2: provide technology enablement, that's a very easy way to get in.
6:02
Speaker 2: We supplement, we evolutionize kind of the financial tool set
6:08
Speaker 2: available to members generally. Certainly though, as we get more
6:12
Speaker 2: involved with our credit union partners and community banking partners,
6:15
Speaker 2: it's not just credit unions, also community banks. We are
6:18
Speaker 2: able to more fundamentally transform the way they operate, you know,
6:23
Speaker 2: even when you look at things like self sovereign identity.
6:26
Speaker 2: The CFPB has recently come out and talked about how
6:29
Speaker 2: open and throw Hit Chopra of the CFPB has explicitly
6:33
Speaker 2: used the term open and decentralized. He knows what he's
6:37
Speaker 2: talking about. We know what he's talking about. Our credit
6:39
Speaker 2: union and community bank partners know what he's talking about.
6:42
Speaker 2: And it's a it's a more open and transparent financial
6:45
Speaker 2: ecosystem that prioritizes access and ownership over centralization and silos.
6:55
Speaker 1: Yeah, we're going to talk about HADERA in a little
6:58
Speaker 1: bit of you know, some of the concepts on why
7:00
Speaker 1: you guys are going that direction. I know mats Harmon
7:02
Speaker 1: also sets I think on your board. So I want
7:05
Speaker 1: to I want to learn a little bit more about that.
7:07
Speaker 1: I was looking at a tweet right here. Today, Banks
7:10
Speaker 1: Social and collaboration with industry Partners and Advisors announces the
7:13
Speaker 1: proposed DeFi Federal credit union, first digital native self custody
7:18
Speaker 1: credit union, powered and distributed by Ledger technology. Explain what
7:22
Speaker 1: this is and when will it be fully approved? I
7:26
Speaker 1: know this is in a proposal state right now.
7:28
Speaker 2: Yeah, so this is this is one of the original
7:31
Speaker 2: things that when I was, you know, bridging kind of
7:33
Speaker 2: from pere DeFi into where can this live in a
7:36
Speaker 2: regulated ecosystem? Right because I think from my perspective at
7:42
Speaker 2: least regulations are probably not going away. We shouldn't just
7:45
Speaker 2: throw them to the wayside, but we need to find
7:48
Speaker 2: something that provides that ownership structure where we own the rail,
7:51
Speaker 2: where we own the outcome. And in looking for that,
7:55
Speaker 2: that's how I found credit unions and so we talked.
7:57
Speaker 2: You know, initially we got approval on our our charter,
8:00
Speaker 2: on our on our membership what's called a field of
8:03
Speaker 2: membership and credit unions. That's why credit unions really don't
8:06
Speaker 2: compete because they each focus on a field of membership
8:10
Speaker 2: or a subset group of a of an entire group.
8:12
Speaker 2: It's not like Chase, where Chase wants everybody in the
8:15
Speaker 2: United States to own to be a bank at Chase.
8:18
Speaker 2: And so we started Defy. We've since partnered with a
8:23
Speaker 2: credit union out of Virginia that is transferring their membership
8:32
Speaker 2: into supporting the Defy Federal credit union membership. So you
8:36
Speaker 2: know what they had was they have all the infrastructure.
8:39
Speaker 2: They've got all the existing kind of initial systems that
8:42
Speaker 2: are plugged into the existing rails that we can take
8:45
Speaker 2: advantage of, and then bolting on all the new systems
8:48
Speaker 2: that provide for self custody, tokenization of a dollar, tokenization
8:52
Speaker 2: of loans, liquefying loans, you know, things that can become
8:56
Speaker 2: so much more efficient, but that also require those existing rails.
8:59
Speaker 2: How to bring money from bank A to this new
9:02
Speaker 2: banking institution, you need rails, and so we've partnered with
9:06
Speaker 2: I can't really say the name of the credit union,
9:08
Speaker 2: but a very innovative, forward looking CEO out of Virginia.
9:13
Speaker 2: So it started as an idea where we would build
9:16
Speaker 2: a credit union from scratch. We worked with the NCUA,
9:19
Speaker 2: who's the regulator of credit unions. They're essentially the fdice,
9:23
Speaker 2: the FED, and the OCC wrapped into one regulator, and
9:26
Speaker 2: they have autonomy over all credit unions, just like the
9:29
Speaker 2: FED has autonomy. They've got autonomy. And so we transitioned that.
9:34
Speaker 2: We saw that as an easier path and transition that certainly, though,
9:38
Speaker 2: you know, I think it would be I think it
9:39
Speaker 2: would be wrong to think that one financial just like
9:43
Speaker 2: do we want one crypto ecosystem? Do we want one
9:47
Speaker 2: coin to represent all of our future of finance? Probably not.
9:52
Speaker 2: We probably want, you know, kind of more of like, hey,
9:55
Speaker 2: if I can create value with some ecosystem that I
9:58
Speaker 2: think is valuable and other people think it's valuable, it's
10:00
Speaker 2: more about the interchange of value for the future. Most
10:03
Speaker 2: credit unions are kind of like analog dows. Yeah, yeah,
10:07
Speaker 2: they're kind of like analog Dows. And so by providing
10:09
Speaker 2: this tooling set we can we can allow them to
10:12
Speaker 2: all create micro economies that are interoperable with each other,
10:17
Speaker 2: which I think is what the CFPB and kind of
10:19
Speaker 2: what the future of finance really needs to be about.
10:22
Speaker 1: So I'm on your website right Heredfi dot Coop bank yourself.
10:26
Speaker 1: So this is kind of an outline of what you
10:28
Speaker 1: guys are getting going. When do you think this will
10:32
Speaker 1: start to gain ground and really start to be something
10:36
Speaker 1: that people can really start to participate in.
10:38
Speaker 2: This is already available, you know, We've got we've got
10:41
Speaker 2: thirty credit unions. I mean, if you go look through
10:43
Speaker 2: kind of our you know, like one of the ones
10:45
Speaker 2: who's about to launch right now, really large credit union
10:47
Speaker 2: called CEU one, they're about to launch. We've got several
10:51
Speaker 2: credit unions around the United States that we've implemented self
10:54
Speaker 2: custody digital wallets into the digital banking app. So literally
10:58
Speaker 2: in your app, your phone app for your bank or
11:01
Speaker 2: your credit union, you can log in, move, buy assets
11:05
Speaker 2: in a self custody way, sell assets in a self
11:07
Speaker 2: custody way. We're working on some even more novel solutions
11:10
Speaker 2: that allow for payments infrastructure to be embedded right in
11:13
Speaker 2: the app. You can have one account, one digital asset account,
11:17
Speaker 2: and have that representative of all of your bank, you know,
11:20
Speaker 2: have all your bank accounts connected into that, you know,
11:24
Speaker 2: and and Liquify if you need a Liquify bitcoin to
11:26
Speaker 2: to you know, pay for something alone. For example, right
11:30
Speaker 2: you need you need to make a payment on a loan, Well,
11:33
Speaker 2: I can't just use bitcoin in real time to make that.
11:35
Speaker 2: Maybe you don't want to, maybe you want to stack SATs,
11:37
Speaker 2: but you know you should have that option or you know,
11:40
Speaker 2: turning your paycheck into a portion of that like in
11:43
Speaker 2: your banking app. And we believe that writing owning the
11:47
Speaker 2: rails for members to own access. For example, why should
11:51
Speaker 2: you need five intermediaries between you and a ch or
11:54
Speaker 2: fed now in the United States you don't, And a
11:57
Speaker 2: credit union gives you that opportunity in that possibility.
12:00
Speaker 1: So I'm here on the NCU site right now and
12:02
Speaker 1: just looking at the credit unions. You know this one
12:05
Speaker 1: of course is down near US Space Coast Credit Union.
12:08
Speaker 1: So those are the kind win. Now obviously if I
12:12
Speaker 1: search defy, it's not on there right now. But will
12:15
Speaker 1: we see DeFi show up here at some point.
12:18
Speaker 2: Absolutely, So that's what's in. That's absolutely. So it's a
12:22
Speaker 2: federal charter. We're in stage two what's called there's three
12:25
Speaker 2: stages of the chartering process. Stage one as you get
12:28
Speaker 2: your field of membership approved. That's basically where they tell
12:31
Speaker 2: you that your group that you're going after is specific
12:36
Speaker 2: enough to warrant a individual charter. It can't be too broad.
12:41
Speaker 2: You can't say, hey, we're going after everybody in the
12:43
Speaker 2: United States. So crypto members, crypto members, right, people who
12:48
Speaker 2: care about crypto, people who care about the evolution of
12:50
Speaker 2: crypto and financial kind of evolution of finance. So that's
12:54
Speaker 2: our field of membership. We got stage two approved, which
12:57
Speaker 2: was essentially our business package and charter member. You know,
13:00
Speaker 2: there there's a The last stage is really honing in,
13:03
Speaker 2: and that's where we've transitioned it. Instead of whole cloth
13:07
Speaker 2: starting a credit union from scratch, there was so much
13:11
Speaker 2: more value in transitioning and existing credit union. Who wanted
13:15
Speaker 2: to be novel who wanted to, you know, kind of
13:18
Speaker 2: explore the opportunities available in this new paradigm of finance.
13:22
Speaker 2: Why not leverage that.
13:23
Speaker 1: There's a couple of things I wanted to get on
13:25
Speaker 1: in terms of like a regular bank FDIC comes in
13:28
Speaker 1: and secures your deposits. Is there the same kind of
13:31
Speaker 1: thing that happens within a credit union.
13:33
Speaker 2: Yeah, so nc UA does that. The difference between the
13:36
Speaker 2: main difference between credit unions and the banks is that
13:40
Speaker 2: banks have three regulators that regulate them. They've got the FED,
13:44
Speaker 2: which is like the monitor, the regulator for how how
13:47
Speaker 2: you work. You've got the FDIC, which is the insurer,
13:49
Speaker 2: and then you've got the OCC okay, the Office of
13:53
Speaker 2: the Comptroller Currency Controller. In in credit unions you just
13:59
Speaker 2: have the ends. All three of those regulators are boiled
14:02
Speaker 2: up into the single regulators. So the inscuat yep, they ensure,
14:07
Speaker 2: they regulate, they kind of create policy, they do it all.
14:10
Speaker 2: And we've been working what would be you.
14:13
Speaker 1: Should talk toivalent what what would be the equivalent of
14:16
Speaker 1: like an FDIC insurance for if i'm, if i'm.
14:20
Speaker 2: It's exactly the same same thing, exactly the same two
14:22
Speaker 2: hundred and fifty thousand dollars. It's exactly the same.
14:24
Speaker 1: Have you seen any innovation in the merchant services side,
14:28
Speaker 1: because obviously businesses in many cases are tied into having
14:31
Speaker 1: to sign up with certain merchant services. That is a
14:34
Speaker 1: huge part of their fees annually that they're paying. And
14:38
Speaker 1: then you have the big struggle, which is the fees
14:41
Speaker 1: that you're paying on the tax you're collecting for the government.
14:45
Speaker 1: You know. So there's multiple issues that are facing retailers
14:49
Speaker 1: and a lot of businesses today. Anything you see coming
14:52
Speaker 1: down the pipe on that.
14:53
Speaker 2: Yeah, absolutely. So we are with a couple of our
14:55
Speaker 2: Credit Union UH partners working on some novel plug ins
15:02
Speaker 2: to existing merchant merchant service providers like Clover, like some
15:05
Speaker 2: of these other things where you know, they can get banked,
15:08
Speaker 2: Stripe things like that. So our payments have already works
15:11
Speaker 2: really closely with Stripe and a couple of these other
15:14
Speaker 2: merchant service providers. But getting it into the form of
15:19
Speaker 2: you know, how do you how do you cut out
15:21
Speaker 2: the heavy three and a half four percent fee? Ye,
15:24
Speaker 2: if we do it on a if we do it
15:25
Speaker 2: on a crypto network, i e. If we do it
15:27
Speaker 2: on HADERA where the transaction feet point zero zero one,
15:31
Speaker 2: and then we put as a network a very small,
15:33
Speaker 2: you know, deminimous fee on top of that just to
15:36
Speaker 2: maintain the network. You're talking about orders of magnitude, more efficiency,
15:40
Speaker 2: more scales of costs, and they're they're you know, they're
15:44
Speaker 2: settling in just the same amount of time. They're immutable, right,
15:48
Speaker 2: They're not maintained by one single entity, so many value uh,
15:52
Speaker 2: you know, paradigms there for sure.
15:54
Speaker 1: I'm looking speaking of Adera, I'm looking at a tweet
15:56
Speaker 1: from them at the intersectional blockchain on open banking. They're
16:00
Speaker 1: talking about you guys, bank social, the web three platform
16:04
Speaker 1: kind of enabling this next generation here. Why choose Sadara?
16:08
Speaker 1: What was the kind of the genesis of going that direction?
16:12
Speaker 2: Yeah, you know, I'll just highlight the top three. I
16:15
Speaker 2: think there's many reasons why. The top three for us is,
16:19
Speaker 2: you know, you have the whole concept of a validator network,
16:23
Speaker 2: a staking network, right, who's validating the transactions with thirty
16:27
Speaker 2: nine fortune five hundred companies that are known that are
16:32
Speaker 2: on the count. Government, you know, governance, right, there's people
16:36
Speaker 2: don't think that's decentralized. I think that's decentralized. I think
16:39
Speaker 2: that's one of the better mechanisms for decentralization that you
16:42
Speaker 2: can have. You know, the collusion resistance, the ability to
16:47
Speaker 2: in the event that collusion happens, the ability to hold
16:51
Speaker 2: accountability towards those actors. It's unprecedented. When we look at
16:55
Speaker 2: kind of the next piece of why we chose Hidera,
16:57
Speaker 2: it's the fixed fee and dollars. If I'm a business
17:00
Speaker 2: and I'm having to contend with I mean, dollars are
17:03
Speaker 2: doing this all day right now, right compared to the
17:05
Speaker 2: rest of the world. You know, the dollar goes up,
17:07
Speaker 2: the dollar goes down. But if my fees, you know,
17:10
Speaker 2: if the gas fees or the or the network fees
17:12
Speaker 2: are also doing that and I'm having to balance counterbalance
17:15
Speaker 2: both of those, It's very hard to run a sustainable
17:18
Speaker 2: business model on that. And so with HADERA, we kind
17:21
Speaker 2: of get the stability of knowing what our fixed cost
17:26
Speaker 2: fees are going to be. And then the third thing
17:28
Speaker 2: that I think just generally for businesses to be fast nimble,
17:32
Speaker 2: you know, try use cases, tripods, the infrastructure that was
17:36
Speaker 2: built in the form of you know, getting a little
17:38
Speaker 2: under the hood with technology, the SDKs, the development kits
17:41
Speaker 2: that were built, multi language, robust development kits that within
17:45
Speaker 2: a couple hours of seeing the development kit as a developer,
17:50
Speaker 2: very clean, you can get something off the ground.
17:52
Speaker 1: No, I know that, I mean those are those are solid,
17:55
Speaker 1: solid arguments, and I think you're right, there are some
17:57
Speaker 1: good alignments there with what you guys do. Vision is
18:01
Speaker 1: I want to go further into how banking is somewhat
18:05
Speaker 1: being transacted today. Here's David Market Marcus from talking about
18:10
Speaker 1: bitcoin lightning, and this is something that when you look
18:14
Speaker 1: at they've been talking about this quite for quite some
18:16
Speaker 1: time and trying to do things with light spark. Do
18:19
Speaker 1: you see this as being a competition to what potentially
18:24
Speaker 1: eventually could go into traditional banks where the conversion is
18:27
Speaker 1: actually happening outside before it actually comes into a traditional
18:31
Speaker 1: fiat bank. What are your thoughts on that?
18:34
Speaker 2: Yes, I think that the I think that the convergence
18:38
Speaker 2: of those two systems is happening now. I mean this
18:41
Speaker 2: is literally some of the things that we're working on
18:44
Speaker 2: with our credit union partner. Literally, our solutions are bolted
18:48
Speaker 2: directly onto the banking core. They directly touch your dollars
18:52
Speaker 2: and cents and so there's no there's no inter intermediarya
18:56
Speaker 2: in the middle. And because the institution is owned by you,
18:59
Speaker 2: when you put money into a credit union, you own
19:01
Speaker 2: the institution, you own the whole solution, end to end.
19:05
Speaker 2: That's what's exciting about it.
19:06
Speaker 1: Not that way with traditional banks. What about Robinhood. You
19:09
Speaker 1: look at what Robinhood is trying to do. They seem
19:11
Speaker 1: to be encroaching on banking more and more. Obviously they're
19:15
Speaker 1: a crypto exchange and a brokerage. Do you see those
19:18
Speaker 1: kinds of financial systems starting to impede or possibly compete
19:23
Speaker 1: maybe on a third you know rail of the banking
19:26
Speaker 1: system that kind of has become, whether you look at
19:29
Speaker 1: neobanks or what might be happening here in the credit
19:31
Speaker 1: union space. Just your thoughts on how that might play out.
19:35
Speaker 2: It already is impeding and I think that's the that's
19:38
Speaker 2: the point that we all need to understand. These are
19:40
Speaker 2: unregulated banks. So when you look at cash app, when
19:43
Speaker 2: you look at PayPal, when you look at Robinhood, when
19:46
Speaker 2: you look at these are unregulated banks, you know you
19:48
Speaker 2: don't have the same protections of an NCUA or an
19:51
Speaker 2: FDIC insured. I'm not saying that's better. I'm just saying
19:54
Speaker 2: that that's a consideration that should be had. Right, there's
19:59
Speaker 2: fine print. I mean a lot of times when you
20:00
Speaker 2: see these inditions in.
20:02
Speaker 1: Whole icee, how are they getting an FDIC insurance on
20:04
Speaker 1: your deposits? If that were not the case, because there's
20:07
Speaker 1: well through a a sister.
20:08
Speaker 2: Bank, a bank, right, they're cycling it through a partner bank,
20:12
Speaker 2: a sister bank, And so the whole idea is, how
20:15
Speaker 2: do we put that technology, How do we put a
20:17
Speaker 2: robin Hood self custody type of technology right in your
20:21
Speaker 2: bank so it's not a it's not a facade on
20:25
Speaker 2: top of another banking infrastructure that's most likely using other
20:29
Speaker 2: third party merchant rails, and then you're only dealing with
20:32
Speaker 2: one bank. Like, that's not that's not very open, right,
20:35
Speaker 2: Like I want to be able to take my robin
20:36
Speaker 2: Hood account or my self custody wallet, for example, and
20:40
Speaker 2: if I want that to be at my Chase account,
20:42
Speaker 2: tied into my Chase account directly, right, not through some
20:45
Speaker 2: intermediary connectivity where I'm going to pay fifteen dollars to
20:48
Speaker 2: get it out the other side. If I want it
20:50
Speaker 2: to be tied directly to my bank a because most people,
20:53
Speaker 2: I think have more than one financial tool, and a
20:57
Speaker 2: lot of times the reason why they get a robin
20:59
Speaker 2: Hood or a cash app is because these institutions have
21:03
Speaker 2: been left so far behind. Technology is so expensive for
21:06
Speaker 2: them to implement. They've been left so far behind. But
21:09
Speaker 2: really the best place for that to live is at
21:12
Speaker 2: the financial institution, where you're cutting out the vast majority
21:17
Speaker 2: of middlemen to get the same type of outcome because
21:20
Speaker 2: at the end of the day, the outcome is the outcome.
21:22
Speaker 2: The money gets into your account. The question is how
21:24
Speaker 2: much did that cost? How much risk was introduced in
21:27
Speaker 2: that equation. So I agree with you. I think that
21:30
Speaker 2: there's a massive it's not coming, it's here, And that's
21:33
Speaker 2: what we're really working to displace is we need people
21:37
Speaker 2: working directly with institutions, multiple financial institutions, because the intermediary
21:43
Speaker 2: of a Robinhood or a cash app doesn't provide any
21:46
Speaker 2: more stability to the system. Frankly, yeah, it fragments the
21:49
Speaker 2: stability exactly.
21:50
Speaker 1: I want to hit on a I know we're running long, hare,
21:52
Speaker 1: I just want to hit on a few points real quick.
21:55
Speaker 1: First thing, I'm over on your wallet, So get thewallet
21:58
Speaker 1: dot com if you guys want to find the wallet
22:01
Speaker 1: right here on bank Social. So this is available and
22:04
Speaker 1: eventually the way this is going to work. If I
22:07
Speaker 1: want to plug my DeFi wallet on bank Social into
22:11
Speaker 1: the Space Coast credit union, you know, and utilize that,
22:16
Speaker 1: how soon would I be able to do that?
22:19
Speaker 2: Okay, so that's already happening in several credit unions. You
22:22
Speaker 2: can already do that in several credit Is there a list.
22:24
Speaker 1: Of where those credit unions are? Is there a place
22:27
Speaker 1: out there where we could see see that list?
22:30
Speaker 2: So we're being a little strategic because we do have
22:33
Speaker 2: a few few competitors that are in the market. What
22:37
Speaker 2: I can tell you is that here in the next
22:40
Speaker 2: probably thirty five to forty days, we're going to be
22:43
Speaker 2: doing a lot of strategic campaigning with our with our
22:48
Speaker 2: partner credit unions. You know, the ability to bring in
22:51
Speaker 2: your self custody wallet, make it portable, and also have
22:55
Speaker 2: access directly to buy, sell, liquidate, you know, get it
22:58
Speaker 2: on a payment rail directly for the lowest absolute cost
23:01
Speaker 2: risk and cost is there like we're they are now.
23:05
Speaker 2: We're just evolving those those points, all right.
23:08
Speaker 1: So I'm looking at a couple of other things here.
23:10
Speaker 1: I want to look at. This is BSL. This is
23:12
Speaker 1: on Sauser schwap this, so this is the token side
23:15
Speaker 1: of things. Trading fees. Why why would we see trading
23:19
Speaker 1: fees around this?
23:21
Speaker 2: Yeah, So when we originally launched the idea of bank
23:24
Speaker 2: Social was the you know, the one of the components
23:28
Speaker 2: that's still there that that we still heavily work on
23:32
Speaker 2: is the dow and the lending component that we have.
23:35
Speaker 2: So we've done loans to businesses. This fee that's taken
23:38
Speaker 2: off is put in a lending pool and then those
23:41
Speaker 2: funds are lent and service fees, interest is all paid
23:47
Speaker 2: back by the person taking out the loan, and then
23:51
Speaker 2: those are distributed to all the token holders who stake.
23:54
Speaker 2: So okay, that is a DeFi lending protocol that is
23:58
Speaker 2: built into that token. Again, this all happens on chain.
24:02
Speaker 2: This all happens without the facilitation of you know, kind
24:06
Speaker 2: of human interaction. We wanted to make it a pure
24:08
Speaker 2: defive play. I mean, we wanted it to be a
24:11
Speaker 2: real sustainable use case.
24:13
Speaker 1: So you've got a tweet here it's air drop Day.
24:15
Speaker 1: This just happened when it was August fifteenth, and this
24:20
Speaker 1: is all Wallet's captured in the BSL and HBAR and
24:24
Speaker 1: Secura NFT snapshots will be air drop their BSL. So
24:27
Speaker 1: that occurred. Now you've got scenarios happening within the NFT's
24:33
Speaker 1: big news obviously today was the SEC sending a well's
24:36
Speaker 1: nose over to open Sea. So now we've got you know,
24:39
Speaker 1: the true NFT market taking place on that within the NFTs.
24:43
Speaker 1: I mean, first of all, businesses that are started utilizing,
24:46
Speaker 1: starting to use blockchain and the NFTs for everything from
24:50
Speaker 1: membership and loyalty and all those things. You feel like
24:53
Speaker 1: those are going to be at risk from the SEC
24:55
Speaker 1: trying to impede on what's happening with just traders over
24:59
Speaker 1: on something can open.
25:00
Speaker 2: See I don't I think that there was a period
25:03
Speaker 2: of time where when the SEC started going after And
25:06
Speaker 2: I'm not a lawyer, so you know, take my take
25:09
Speaker 2: my thoughts with for what they're worth. But when the
25:13
Speaker 2: when the SEC started going after you know, I c
25:15
Speaker 2: O S. People pivoted very quickly to trying to you know,
25:19
Speaker 2: repurpose the ICO framework into a NFT framework because they
25:23
Speaker 2: thought they would be safe. What we have in d
25:25
Speaker 2: REC first ever, we're part of the DREC Alliance. It's
25:28
Speaker 2: the first ever decentralized recovery mechanism that splits your key.
25:32
Speaker 2: So in this same framework that we were talking about,
25:36
Speaker 2: we split your key up and we put it into
25:38
Speaker 2: multiple credit unions. So these credit unions host nodes, and
25:42
Speaker 2: these nodes are Yeah, it's very interesting because it's the
25:45
Speaker 2: new concept of a digital vault. It's the new like
25:49
Speaker 2: you know, you had the old what were they called
25:52
Speaker 2: the safety deposit box. This is the new version of US.
25:56
Speaker 2: It's a digital safety deposit box. The difference is that
26:00
Speaker 2: no one credit union or even based on how we
26:02
Speaker 2: built the cryptography and we worked with doctor Lehmann from
26:04
Speaker 2: Hadera and Mants on this very closely. The way the
26:08
Speaker 2: cryptography works, only you can recover the key, and the
26:13
Speaker 2: really cool part is that it almost lives on perpetuity.
26:16
Speaker 2: When we look at the failure rate of credit unions
26:20
Speaker 2: and we look at how many times we split up
26:22
Speaker 2: your key multi party computation and the number that you
26:26
Speaker 2: need back to reconstitute your key, there's literally a mathematical
26:30
Speaker 2: equation that says you'll never lose your key, like you
26:33
Speaker 2: never have to worry about losing your key again.
26:35
Speaker 1: And so that solves the biggest problem in crypto for sure,
26:39
Speaker 1: especially with new people coming in. So if you can
26:42
Speaker 1: automate that exactly and getting it into a position, I'm
26:45
Speaker 1: looking here at the price for zero trust key recovery.
26:49
Speaker 1: This is the DRIK. What's the difference is on these
26:51
Speaker 1: levels right here? Because yeah, so this was this was
26:55
Speaker 1: more of a YEP.
26:56
Speaker 2: This was more of an initial generation. So this bought
26:59
Speaker 2: like up front, you know, there's there's a little bit
27:01
Speaker 2: more included with this, but generally anybody's going to be
27:04
Speaker 2: able to get d REC for a low monthly you know,
27:07
Speaker 2: just a couple bucks deal. Right on an ongoing basis,
27:10
Speaker 2: the secure tag is a what we what we believe
27:15
Speaker 2: is that the future. I mean, you're you're probably well
27:17
Speaker 2: aware that things like U two factor off with a
27:20
Speaker 2: phone completely hackable. Nowaday, I see a lot of I'm
27:24
Speaker 2: not going to name names, but I see a lot
27:25
Speaker 2: of products that are doing email authentication for for key recovery, terrible,
27:32
Speaker 2: terrible right by adding terrible idea, you really need multi factor, right, Like,
27:38
Speaker 2: those things should not go away, but they should be
27:40
Speaker 2: supplemented with additional factors. This is an additional factor. This
27:44
Speaker 2: is a physical device that pairs with the phone, stops
27:47
Speaker 2: the phone from being able to do things that generally
27:50
Speaker 2: you wouldn't want it to do if you weren't there.
27:52
Speaker 2: So if somebody just picks up like a hardware in essence,
27:55
Speaker 2: it's almost like a hardware wallet. But I'm not a
27:57
Speaker 2: big fan of the hardware wallet because it still has well,
28:00
Speaker 2: let me not say I'm not a big fan. I
28:02
Speaker 2: think that they're great, but they still have the same
28:05
Speaker 2: achilles heel. It's the key phrase, right, that's the achilles
28:08
Speaker 2: heel of all this.
28:09
Speaker 1: So why not why not work with some of the
28:11
Speaker 1: hardware wallet manufacturers to be able to integrate into these
28:15
Speaker 1: in the future, like you know, we you know, a ledger.
28:18
Speaker 2: We do think that there's an opportunity to do that.
28:21
Speaker 2: This is also this secure tag is also a part
28:24
Speaker 2: of what we're utilizing for digital banking infrastructure security, so
28:28
Speaker 2: people being able to log in. We kind of feel
28:31
Speaker 2: like an intuitive multi factor ecosystem of devices and you know,
28:37
Speaker 2: face ID and phone numbers and emails, they all need
28:40
Speaker 2: to work cohesively in a very intuitive way, and not
28:44
Speaker 2: just for one part of the ecosystem, but for the
28:47
Speaker 2: entire ecosystem.
28:48
Speaker 1: All right, So one last question, Ark, I actually have
28:51
Speaker 1: two one on the on the idea of earning yield
28:54
Speaker 1: on stable coin. Is that something, because I mean, we're
28:56
Speaker 1: seeing this with coinbase, you see this with robin Hood.
29:00
Speaker 1: Most likely we're going to see this with stable coin regulations,
29:03
Speaker 1: even maybe within banks soon. What are your thoughts on that?
29:08
Speaker 2: So I think that banks are already doing this. I
29:10
Speaker 2: think what you're really just talking about is a shift
29:13
Speaker 2: to a lower cost model of doing this, right, So
29:15
Speaker 2: how do you bring in deposits? You offer yield and
29:18
Speaker 2: a stable coin is really just backed by So we
29:21
Speaker 2: have a stable coin called our USD for r everybody's USD.
29:25
Speaker 2: And the whole idea is that instead of it being
29:27
Speaker 2: at one institution like a like a b n Y melon,
29:32
Speaker 2: our stable coin is distributed amongst many credit unions. So
29:35
Speaker 2: it's a decentralized stable coin backed one for one, and
29:38
Speaker 2: the credit unions pay for these deposits, right, and this
29:40
Speaker 2: is something they already do, so we don't have to
29:42
Speaker 2: we don't have to build a layer again. It's all
29:45
Speaker 2: about removing the middleman, putting you and your financial future
29:50
Speaker 2: as close to the rail and as close to ownership
29:52
Speaker 2: of the institution as possible while introducing these novel concept
29:57
Speaker 2: these novel DeFi digital assets. You know, how do we
30:00
Speaker 2: marry the two and create this new financial paradigm going forward?
30:03
Speaker 1: Yeah, for sure. Last question on this was crypto hard
30:06
Speaker 1: money loans. So you've got this on your website over there,
30:10
Speaker 1: So stakenhold crypto down payments, So using your down payments
30:14
Speaker 1: for hard money like a construction loan in real estate? Yeah,
30:18
Speaker 1: how are you guys doing this. How does this work? Explain?
30:23
Speaker 2: So essentially, we've got loans dot bank, soocial dot io.
30:26
Speaker 2: Somebody can come in apply for a loan, it goes
30:29
Speaker 2: to the Dow. The Dow has some delegates. The delegates
30:31
Speaker 2: review based on a measure that was passed by the
30:34
Speaker 2: Dow some rules. It's only business lending, so you know,
30:37
Speaker 2: we had to comply with UCC statewide UCC kind of
30:41
Speaker 2: worldwide business lending. So if you do consumer lending in
30:44
Speaker 2: the United States, you come under NMLS, you come under
30:47
Speaker 2: Consumer Protection CFPB. With business lending, there's you know, we
30:52
Speaker 2: even checked with places like New York early on to
30:54
Speaker 2: ensure that we're fully compliant with New York law. So
30:57
Speaker 2: business lending is what the Dow exclusively does. Again, we've
31:01
Speaker 2: got loans outstanding, so that returning the field the UCC.
31:05
Speaker 1: On the crypto that you're putting up for collateral.
31:09
Speaker 2: It can So the interesting thing is with working with
31:11
Speaker 2: the TBC. Here in Texas, TBC pioneered UCC law that
31:15
Speaker 2: allows you to perfect digital assets in a UCC filing,
31:20
Speaker 2: So before you weren't able to. Yeah, isn't that interesting?
31:24
Speaker 2: So you can actually take digital assets put them in
31:26
Speaker 2: a multi sig wallet for example, where both sides or
31:29
Speaker 2: multiple parties own escrow on that and you can perfect
31:33
Speaker 2: leanable rights first, you know, first position, second position, third
31:37
Speaker 2: is leanable rights against that. The TBC pioneered that here
31:40
Speaker 2: in Texas. Really awesome.
31:42
Speaker 1: Okay, So that's I don't think that that's available nationwide
31:45
Speaker 1: right now for UCC integrations like that. You're saying that's
31:49
Speaker 1: available now in Texas.
31:51
Speaker 2: It's available in like handfuls of states, and it's it's
31:54
Speaker 2: actually gaining traction a lot faster than you would think.
31:56
Speaker 2: So your traditional ones that you would think, like the Wyomings,
31:59
Speaker 2: the the I think even Colorado. Don't quote me on this,
32:02
Speaker 2: but definitely Texas. And there's handfuls. It's not just two
32:05
Speaker 2: or three. There are handfuls now. Generally though, when you
32:08
Speaker 2: have standing or precedent with another regulator, it's not hard
32:13
Speaker 2: if you get into some type legal to utilize standing
32:16
Speaker 2: and precedent and another jurisdiction to you know, bring about
32:19
Speaker 2: kind of a firm, solid case for why it should
32:23
Speaker 2: be considered in your case, even if you're not in
32:24
Speaker 2: a state that recognizes it.
32:26
Speaker 1: Yeah, yeah, for sure. John wing Gey, founder on ceover
32:29
Speaker 1: at Bank Social thank you so much for stopping in today.
32:31
Speaker 1: I learned a lot about this, so this is an
32:34
Speaker 1: exciting time I think for you know, crypto especially, but
32:37
Speaker 1: I think a lot of people as they discover just
32:40
Speaker 1: the freedom that it brings and the ability to go
32:43
Speaker 1: in traditional banking, you know, rails are going to be
32:45
Speaker 1: pretty interested in this in the future. So thanks for
32:48
Speaker 1: coming in today. We appreciate it.
32:50
Speaker 2: Thank you so much. It was a pleasure, you bet all.
32:53
Speaker 1: Right, So you guys are tuned in, maybe on the
32:55
Speaker 1: podcast side of things, jump over here to the YouTube channel.
32:57
Speaker 1: Make sure and subscribe. Like a couple of videos we'll
33:00
Speaker 1: get in your feed and you'll start learning a little
33:02
Speaker 1: bit more about what's happening on blockchain technology as well
33:05
Speaker 1: as business. We go into a lot of details and
33:08
Speaker 1: when it comes to the regulation all that kind of stuff,
33:10
Speaker 1: we cover it here on the show. Of course, all
33:12
Speaker 1: you have to do to catch me is out there
33:15
Speaker 1: on x just follow me. It's at Paul Barrett. We'll
33:17
Speaker 1: catch you next time right here on tech Path